Elliott Wave Theory

Elliott Wave Theory proposes that markets move in repeating, fractal patterns of five "impulse" waves in the direction of the main trend, followed by three "corrective" waves against it. Practitioners use the theory to try to identify which wave the market is currently in, and therefore anticipate the likely next move. Elliott Wave analysis is notably subjective — the same price chart can often be labeled several plausible ways — which is a common criticism, even among traders who find the framework useful for context.